The FCO's (Foreign and Commonwealth Office) budget should be protected in the 2015 Spending Review, with a view to increasing rather than cutting the funds available to support the diplomatic work on which the country's security and prosperity depend.
The Chairman of the Committee, Crispin Blunt MP, said:
"We are living in an increasingly unstable world, and the Government relies on the FCO to have the necessary infrastructure in place so that it can make critical decisions at a moment's notice. But our recent record is not good: the UK failed to manage the outcome of the crises in Iraq and Afghanistan, and the FCO has lacked the expertise, analytical capability and language skills to manage the fallout from the Arab Spring and the crisis in Ukraine.
The demands on the FCO today are greater than ever. The UK needs to build a comprehensive international strategy to defeat violent extremism in the Middle East; it needs to navigate the diplomatic effort to renegotiate the UK's membership of the EU and be prepared to negotiate our exit and establish a new global role; and it needs to respond to the rise of China and consequent security instability in the Far East. In short, we cannot recall a more complex and challenging policy-making environment in recent decades, and the FCO needs to have the diplomatic and analytical capability to re-assert its leading role in foreign policy-making."
Limited scope for further cuts
The Committee finds that the FCO has limited scope to make further efficiency savings. More than half of the savings made under the 2010 Spending Review resulted from the transfer of funding responsibility for the BBC World Service. Any attempt to make a parallel cut to the British Council budget in the 2015 Spending Review would inevitably weaken the UK’s capacity to project soft power and culture in target countries with growing economies or regions with high priority political and human rights concerns, such as Russia and the Gulf.
The Committee was disturbed to hear the Permanent Under-Secretary acknowledge that human rights was now not one of the top priorities for the FCO. It concludes that this is a consequence of the savings imposed so far on the Department, and it believes that human rights should be re-established as a top priority.
Lack of coherence in department funding
The Committee sees a lack of coherence in funding different departments with shared aims. Foreign policy underlies the priorities of other Government departments, notably the Ministry of Defence and the Department for International Development, whose budgets are to be protected. But the FCO, whose budget amounts to less than 3% of the total of the three budgets combined, is to be exposed to the full force of Spending Review cuts. The Committee concludes that it is "beyond irresponsible to treat FCO expenditure as the only unprotected department in this group".